The Alberta economic outlook is generally positive with the highest rate of growth for all provinces of 3.8% this year, says the Conference Board of Canada in its latest forecast released Friday.
"But weak natural gas prices and volatile crude oil prices — particularly the wide spread between Canadian crude and the international benchmark – are leading to uncertainty about future capital spending plans in the energy sector," said the board.
The board forecasts that prices will remain sufficiently elevated so that energy sector investment continues to grow strongly in Alberta. In addition, the province has positive outlooks for employment, income growth and consumer spending, it said.
In 2013, Alberta’s economic growth of 3.0% is forecast to be second in the country behind only Saskatchewan at 3.4%.
The board said that weakening growth in emerging markets, Europe’s fiscal and economic woes, and sluggish job creation in the United States are weighing on growth in the provincial economies. The Provincial Outlook-Summer 2012 forecasts solid growth in Western Canada this year and next. Central and Atlantic Canadian economies will slowly gain traction over the same period.
Nationally, growth is forecast for 2.1% this year and 2.4% next year.
The swoon in prices for many commodities in recent months will have an impact on resource sector profits. Most metals and minerals prices, however, remain relatively high – which will continue to drive exploration activity and new mine construction, said the board.
